Mr. Victor, China Trader

China General Interest

The NZ Listener recently profiled NZCTA Honorary Executive Life Member, Victor Percival O.N.Z.M. This excellent article tells the story of Vic's early days as a China trader.

Victor Percival saw nothing wrong in trading with the Communists – and the years have proved him right

In the mid-1950s, it was becoming obvious to a young Victor Percival that New Zealand couldn’t continue relying on the mother country for its economic security. The UK, he was sure, would shift its focus to a consolidating Europe, and loyalty to its old colonies in the Antipodes would wane. New Zealand was going to need some new friends to trade with.

Percival was an entrepreneur who had left school at 15, gone to work sweeping floors and licking stamps with the Hardie Trading Companies in Auckland, studied law and accounting at night school, and then set up an import-export business in his early 20s.

China, with a population at the time of 650 million, seemed the obvious place for him to look for deals.

Never mind that it had recently undergone a communist revolution and that information was scarce. By poking around in Auckland’s’ left-wing bookshops, he found name and addresses of the Government trading organisations that had been set up after the 1949 revolution. He would write airmail letters asking what they had to sell to New Zealand, and they would reply. There and back, the communication would take about a month. He did his first deal in 1956, bringing in products like canned pineapple and rice from the Cereal, Oil and Foodstuffs Corporation. From National Animal By-products Corporation, he sourced the feathers that went into Arthur Ellis’s Dunedin-made eiderdowns. Having proved himself trustworthy, he then sold New Zealand tallow to the Chinese, and later dealt in meat, wool and dairy.

In early 1957, the first China Export Commodities Fair – better known as the Canton Fair – was in held in the city now known as Guangzhou. When the second fair was held in late 1957, Percival was there. He travelled by train from Hong Kong, through areas where the living conditions were primitive, the roads were still dirt, and farmers laboured to water their field with rudimentary irrigation schemes.

Since then, Percival has been to about 60 Canton fairs. When the anniversary of the 100th Fair was held in 2006, he was the guest of honour. He was the only foreigner asked to make a speech, and it was televised to an audience of 400 million. For a time, Percival was deputy chairman of the Auckland division of the National Party and, he remembers “people couldn’t understand who this National l upstart was who was trading with the Communists”. In 1958, when he was in China, his Auckland business partner received a visit from the SIS. Bu then-Prime Minister Walter Nash approved of Percival’s China links, he says, and would periodically seek his advice.

When in China, his strategy was to focus on business and stay clear of politics. But there was no avoiding the compulsory indoctrination classes he had to attend over about 10 years. “I just listened politely and then ‘Let’s get on with business.’”

Throughout the violent chaos of the Cultural Revolution, the Canton Fair continued uninterrupted and Percival kept travelling to China. On one visit, he recalls, his hosts advised him to stay indoors during a “spontaneous anti-American demonstration” occurring that night: they would come to his hotel for the obligatory banquet.

Over the years, he has learned to read cultural nuances and settle disputes amicably. For instance, when a shipment of slate arrived badly damaged, he knew the solution was to buy more; compensation for the damaged goods was delivered by way of a cheap deal on the subsequent shipments. “I knew that was the only way to resolve things, which was not to makes them lose face. When I used to tell people that the way to resolve things with the Chinese was to buy more at a discount, the Kiwi’s would say, ‘Get stuffed.’ I said, ‘You realise that if that’s your attitude, you will never get your money.’”

Percival was back in Beijing two months ago as a guest of the New Zeeland Government at the signing of the New Zealand-China Free Trade Agreement. As he had argued for years that China is key to New Zealand’s future, the deal gives him great satisfaction. “People used to say, ‘Ugh, communism’. And I said, ‘It will change.’”

By Rebecca Macfie

This article first appeared in the NZ Listener under the title "Raise the Red Flag". Honorary Lifetime NZCTA member, Vic Percival’s book “Kiwi Pathfinder” will soon be on sale. Contact david.catty@nzcta.co.nz for sales or details.